Constellations spoke with Justus Parmar, venture capitalist and founder of Fortuna Investments, about the landscape of space investment. The discussion looked back on 2023 highlights, as well as covering who to watch in the coming year and how to embrace the risky nature of space investment.

2023: SpaceX Turns Massive Revenue

Space investment fell significantly in 2022 before stabilizing in 2023. Despite this, many companies flourished, most notably SpaceX, which Parmar considers the most significant development in the space economy in 2023. “The biggest development is unequivocally Elon Musk and the progress that SpaceX was able to make and show,” Parmar says.

SpaceX turned almost $10 billion in revenue in 2023. “This space company that was a peripheral space company for only a handful of years, it’s now the second most valuable private company in the entire planet,” he says. Parmar compares Musk’s success with SpaceX over the past year to the revenue generated by massive companies like Walgreens—but considers it even more impressive due to the complexity of the work. “The revenue that SpaceX is doing, one would argue, is a lot more complex and more valuable than selling broccoli in a certain way,” he says.

This economic success “is a huge development,” Parmar says, “not only for SpaceX and what they’ve been able to do and achieve, but the greater ecosystem as a whole in terms of what is potentially possible in the industry.”

2024: Blue Origin on the Rise

Parmar believes that the next year will be transformative for Blue Origin. While Musk holds a significant lead in the space sector, Jeff Bezos has left Seattle after 27 years to focus primarily on Blue Origin. “I’m personally curious to see how big of a leap can he make in this company,” Parmar says, “because he’s got a little bit of a catch-up—or a lot of catch-up to do to SpaceX.”

“This is a guy who knows how to build a company,” he says of Bezos. “They’ve had great success compared to … all these other early-stage space companies. They’re way ahead of those companies in terms of their launch game, their profile, their revenue.” Parmar plans to keep an eye on Blue Origin throughout the coming year, while also evaluating emerging space companies as potential investments to add to his portfolio.

Evaluating potential investments can be tricky in a sector like space, especially considering the influence of powerhouses like Musk and Bezos. “As a matter of practice, we think it’s smart not to compete directly against Elon,” Parmar says. “We think it’s smart to fund companies that are ancillary.” While Parmar is interested in many different space-related companies and technologies, he is particularly interested in working with processes like refueling in orbit. “If I were to pin it into one specific bucket, I think the aspect of refueling is extremely intriguing,” he says. “It’s not going to happen overnight. But we think it’s a logical next step, much like having an electric car and having a charging station.”

Embracing the Unique Features of Space Investment

Anyone familiar with the space sector knows that investing in space is a risky, long-term business. But Parmar views this as an advantage, not a flaw. “Risk is in the eye of the beholder,” he says. “I view risk totally different in a certain way. I actually believe the bigger the risk, the bigger the opportunity.”

Investing in space is also much more speculative than traditional markets that investors like Warren Buffett might be interested in. Finding good investments often means finding the right people. “You have to have tremendous grit and resilience,” he says. “You might have to be sick in a certain way to keep plowing forward, because there’s a lot of pain and punishment.”

Despite this, Parmar is optimistic about the landscape of space investment going forward and plans to add a dozen more space companies to his company’s portfolio over the next three to five years. “We actually think it’s the most opportune time in a lifetime to jump into the space business with our money, our mind and our capital,” he says.

For more on how government spending influences private investment and what a venture capitalist looks for when evaluating an opportunity, listen to the full episode here.